A key difficulty facing insurance companies is that people know more about their health than do insurance companies, and that those people who are seriously ill are the most likely to want to obtain health insurance
What is this phenomenon called?
A) asymmetric information B) moral hazard
C) economic irrationality D) adverse selection
A
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Explain why some costs are considered to be variable and some fixed. How does time enter into the definition?
If you wanted to measure whether the output of an economy was increasing or decreasing across time periods, you would use the real GDP data rather than the nominal GDP data because
a. exports are excluded from real GDP but not nominal. b. real GDP incorporates the impact of federal budget deficits and surpluses; nominal GDP does not. c. real GDP reflects the impact of transfer payments on the economy, but nominal GDP does not. d. real GDP adjusts for changes in the general level of prices, but nominal GDP does not.